Forex Flash: Domestic risk looms for CAD - Scotiabank
FXstreet.com (Córdoba) - CAD is weak but still trading within its three week 127 point range between 0.9843 and 0.9970, according to Camilla Sutton, analyst at Scotiabank.
"Domestic risk looms for CAD, as today's current account deficit is expected to widen to -$15.3bn, drawing attention to the twin deficits", the analyst says. "In addition, after a slew of disappointing domestic releases, tomorrow's GDP (consensus: 0.1%m/m) could be at risk", while the Quebec election risk continues to be underpriced by markets. "Finally, the BoC meets on September 5th".
"These near-term risks could push USDCAD temporarily higher (CAD weakness); however, in the more medium term we still view loose Fed policy juxtaposed against the BoC's hawkish stance, Canada's triple-A rating, the country's large resource base and strong financial system as positives that should keep USDCAD favouring downside (CAD strength)", Scotiabank says. "We expect today's range to fall between 0.9889 and 0.9950".
"Domestic risk looms for CAD, as today's current account deficit is expected to widen to -$15.3bn, drawing attention to the twin deficits", the analyst says. "In addition, after a slew of disappointing domestic releases, tomorrow's GDP (consensus: 0.1%m/m) could be at risk", while the Quebec election risk continues to be underpriced by markets. "Finally, the BoC meets on September 5th".
"These near-term risks could push USDCAD temporarily higher (CAD weakness); however, in the more medium term we still view loose Fed policy juxtaposed against the BoC's hawkish stance, Canada's triple-A rating, the country's large resource base and strong financial system as positives that should keep USDCAD favouring downside (CAD strength)", Scotiabank says. "We expect today's range to fall between 0.9889 and 0.9950".
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